Make Your Working Capital Work Harder: Finding Hidden Value in PaymentsAPRIL 8, 2019

AMERICAN EXPRESS

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AMERICAN EXPRESS CANADA

Kristine Tsaousidis

VICE PRESIDENT, SMALL MEDIUM ENTERPRISE,

GLOBAL COMMERCIAL SERVICES

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How American Express works with businesses

3

Your Business

Your

Customers /

Franchisees

Accept Payment

by Amex

Your Suppliers

Make Payments

with Amex

American Express helps businesses benefit from both accepting payments from clients and

making payments to suppliers by having direct relationships with both

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American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.

American Express Business Solutions

▪ Improve your cash flow

▪ Save on business expenses &

earn rewards

▪ Streamline the billing process

▪ Gain powerful insights

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▪ Accelerate client payments

▪ Reward customer loyalty

▪ Reduce the cost of receivables

management

▪ Transfer credit risk to American

Express

▪ Offer a consistent payment

experience

PAYMENT

SOLUTIONS

RECEIVABLES

SOLUTIONS

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American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.

Only 16% of SMEs are ‘very satisfied’

with current financing options

Sources of Financing

5

Existing

Working

Capital

Traditional

Banks

Partners

Unsecured

Credit

Supply

Chain

Financing

P2P

Investors

Crowd

Sourcing

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American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.

Key Strategies

▪ Turn your Accounts Payable

(AP) & Accounts Receivable

(AR) into Working Capital

▪ Work with Your Suppliers

▪ Flexible Incentives/Rewards

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American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE. 7

Leverage both payables and receivables to extend days cash on hand

Turn AP & AR Into Working Capital

Days Cash on Hand Extended

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American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.

$13,699

$68,493

$205,479

$410,959

$616,438

1

5

15

30

45

Amex Cash Flow Benefit of Extending DPO

$959

$4,795

$14,384

$28,767

$43,151

1

5

15

30

45

Savings on Benefits with DPO Extension

8

Annual Program

Size of $5M

Days

Assumed

WACC 7%

Days

When p

ayable

s e

xte

nded

by

Benefits of Working Capital Management

Extending payable days up to 45 days can unlock $616K of cash flow within a year. Through this, a company can benefit up to

~$43K in interest savings without raising cost of borrowing or negatively impact their financial position on the books.

When p

ayable

s e

xte

nded

by

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American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE. 9

Franchise Ecosystem: Decentralized Buying Group

FRANCHISEE

SUPPLIER

FRANCHISOR

SUPPLIER

ProductProduct

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American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE. 10

Franchise Ecosystem: Centralized Buying Group

FRANCHISOR

FRANCHISEE

CENTRALIZED BUYING GROUP

Product

Product

Product

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American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.

Optimize Supplier Relationships

11

Optimize

Payment Terms

Loyalty Consolidate

Spending

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American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.

Flexible Incentives & Rewards

▪ Spectrum of Benefits:

– Rewards on business

spend

– Travel & entertainment

benefits

– Offset expenses

– Improve DPO/DSO

– Optimize financial metrics

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This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without

American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.

Recap of Strategies

▪ Find Working Capital in Your

Balance Sheet

▪ Work with Your Suppliers

▪ Leverage Incentives/Rewards

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Thank you

Questions? Let's Connect!

Visit us at booth #108

Email us at franchisesolutions@aexp.com

Or visit us online at www.americanexpress.ca/canadianfranchiseassociation

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